CMS Proposes New Mandatory Drug Payment Model to Deliver Lower Drug Prices for Beneficiaries in Medicare Part B
The Centers for Medicare & Medicaid Services (CMS) is proposing a groundbreaking drug payment model to address the increasingly expensive cost of drugs in Medicare Part B while preserving or enhancing Medicare beneficiaries’ quality of care. Building upon the Trump Administration’s historic efforts, the Global Benchmark for Efficient Drug Pricing (GLOBE) is expected to lower spending for Medicare beneficiaries without harming their quality of care while also improving the sustainability of the Medicare program and the Medicare Trust Fund and protecting innovation.
“As HHS Secretary, I am focused on making health care affordable – starting with the price Americans pay for prescription drugs,” said Health and Human Services Secretary Robert F. Kennedy, Jr. “On May 12, President Trump ordered an all-of-government response to the unfair gap between U.S. drug prices and what other nations pay. CMS is answering that call with two new models under Parts B and D that tie drug prices and rebates to costs in comparable countries. Americans deserve access to low-cost medicines on the same terms as other developed nations.
“For too long, the patients who use Medicare Part B and the taxpayers who fund it have been paying far more than people from comparable countries for the exact same drugs,” said CMS Administrator Dr. Mehmet Oz. “The proposed GLOBE Model will reduce costs and improve quality of care without slowing down medical innovation. At CMS, we’re not just talking about making life more affordable. We’re delivering results.”
Americans pay on average three times what other developed countries pay for the same medications, and Medicare Part B drug spending is growing faster than other drug spending in the United States. According to the HHS Office of the Assistant Secretary for Planning and Evaluation, drug spending in Medicare Part B was nearly four times higher than drug spending across all payers (Medicare, Medicaid, commercial) between 2008 and 2021. High costs are causing some older Americans who rely on these medications to experience financial strain and causing some to skip dosages to save money at the expense of their health.
“GLOBE would help make drugs, like life-saving cancer treatments and cutting-edge autoimmune medications, available at prices Americans can better afford,” said CMS Innovation Center Director Abe Sutton. “American should not have to choose between medical treatment and daily living expenses.”
The proposed GLOBE Model would test a new rebate formula for certain separately payable Medicare Part B drugs, which are medications typically administered by physicians in health care settings. The intent of the proposed GLOBE Model is to test an innovative payment model that modifies the Medicare Part B drug inflation rebate calculation for GLOBE Model drugs using international drug pricing information to identify a benchmark that reflects prices paid in a set of economically comparable countries, which CMS expects would reduce program expenditures for Medicare Part B while preserving or enhancing beneficiaries’ quality of care.
GLOBE inclusion criteria would exclude biosimilars and their reference biologicals once a biosimilar enters the market in the United States. The GLOBE Model would operate for five years, beginning Oct. 1, 2026, and ending Sept. 30, 2031, with rebate invoicing and reconciliation continuing until September 30, 2033. The model would apply to Medicare beneficiaries who reside in a defined geographic area, encompassing approximately 25% of Medicare beneficiaries in the United States.
For information on the GLOBE Model, visit https://www.cms.gov/priorities/innovation/innovation-models/globe.
View the proposed rule on the GLOBE Model at the Federal Register at https://www.federalregister.gov/d/2025-23702.
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